Skip to main content

tv   Squawk Box  CNBC  September 25, 2015 6:00am-9:01am EDT

6:00 am
it's friday, september 25th, 2015 and squawk box begins right now. ♪ >> good morning and welcome to squawk box here on cnbc. andrew is off today. the big story here in new york city this morning, pope francis is here. the pontiff continuing his united states tour. thousands greeted him as he arrived in the big apple yesterday afternoon. lining the roadways, waving flags, snapping pictures. today the pope will address the un. he'll also visit the 9/11 memorial, stop at a school in east harlem. go on a motorcade through central park and end with a mass at madison square garden. this is going to be another day
6:01 am
of lock towns throughout the city. traffic wasn't as bad as i expected. a lot of people took head of the warnings to stay clear of the area. first let's get to the markets. check out the futures this morning. you'll see big gain across the board. right now it looks like the dow futures are up by 250 points. the s&p futures up by 24 and the nasdaq up by 52 points. she said it would likely be appropriate to raise rates if near zero in her words sometime later this year. the understanding we had when she spoke last week after taking q and a and stuff it seemed like a very dovish excuse at that
6:02 am
point. markets have sold out since then but yesterday it sounded like it was full speed ahead and they would like to raise this year. >> we never know cause and effect because everybody has different opinions. it looked to us like they had big down days. that would have been a switch from the markets rallying every time we heard -- that would have been a switch. >> i can think of what you've been saying. >> but i have already read this morning that although she said a rate hike could come this year i have read her comments interpreted by a couple of people because it's going to remain low for a long time. and they were attributing the rise in the markets to it. but there's still people around that think easy money is the answer. >> i think there's been a market shift. that is that good news is actually good news at this point
6:03 am
and bad news is bad news and people are looking closely to see if the global economic slow down impacts the united states. >> right and if they do end up raising, it means wrote think the united states can avert. >> hearing from caterpillar yesterday. >> right. >> but that's a global company. they're going to have continued hardships. the united states can stand firm in that and it is out performing. that's what it is. >> but then when i look at europe across the board up 2.5% and that, you know, our futures do go up when we're not trading but they do see what's happening in europe and then i thought -- >> i think europe is up because the dollar is up. >> that's what i thought. >> so that opportunity necessarily mean that it's up -- they had, you know, a fed rate hike here means differ things to us than it does the germans. it means that the euro gets
6:04 am
weaker. 111 now. >> for exports that helps. germany can certainly use good news because the dax is now down 20% from when qe started. a lot of that has to do with obviously volkswagen but a lot of people are saying the auto makers here are down. it's the sign of a bigger picture. the auto makers are under pressure to meet some of these stringent emission standards and cafe standards and they're scrambling and when you scramble, you wonder how madolf started. he started by i'm not going to make this week. i better -- let me just take a little from here to put it in here and then how am i going to do that? the germans it was like wow, really not going to be able to make these clean diesels but people want diesels. we got this little device here that will turn it off and it's a slippery slope that now heads are really going to roll and it's impacting auto makers around the world.
6:05 am
>> there's questions about other auto makers at this point. earlier this week we were saying they weren't doing that and now they're spreading and multiple countries said we're going to change the testing and make it much more rigorous. >> you're stupid enough to buy diesel you deserve it. >> there's no such thing as clean diesel. >> no. i had one once. it's totally like why did i do this? a small health care for chairwoman yellen last night. she is said to be okay this morning after receiving medical attention. she appeared to pause and cough multiple times while wrapping up her remarks. she was helped off the stage but walked off under her own power.
6:06 am
she felt dehydrated at the end of a long speech under bright lights. >> i know how i feel after a long speech. >> it was a 40 page speech. >> listening to a fed head. remember when we used to listen the alan greenspan i would get like that. we're used to bright lights. >> they get to me too. >> there's a lot of -- you can imagine the cartoonists would go crazy. it's a tough job she has. the weight of the world is on every move that they make and that is an unbelievable amount of pressure and it would get to me i know. the pope looked tired last night too. >> they have long days and busy schedules and the weight of the world on their shoulders. >> right. especially the fed. she was seen by emt staff on sight and then continued her schedule so it could definitely just be a 40 minute speech of reading fed stuff. >> i can imagine if you had a
6:07 am
busy day and you haven't taken time to hydrate i can imagine that too. >> it's bad enough to listen to a speech. think about giving a speech like that, it would be even worse, right? >> take even more of your power and stamina. i understand that. let's get to the other big stories this morning. the new apple iphone 6s hits stores today. take a look at some pictures from sidney australia overnight. that's where fans lined up for the new device. analysts forecast 12 to 13 million phones will fly off the shelves this weekend. iphones generated nearly 2-thirds of apple's revenue. people watching all the time trying to make sure that the latest device has as much demand as previous devices have. you can see the fed stock up by 1.2%. also in washington today president obama will welcome his chinese counter part for an official state visit. those talks are expected to include the tense issue of alleged cyber theft. on the economic agenda today a
6:08 am
final reading on second quarter gdp. forecasters are looking for the economy to expand at a 3.7% annual rate. that's the same as the previous reading a month ago. >> stocks on the move this morning, nike, the quarterly results topping estimates despite fears of a china slow down. sales there soared 30%. nike is calling the china numbers amazing. by my calculation, there are 2.8 billion feet in china. that's a huge market. bed bath and beyond posting earnings and revenues in line with estimates. also announcing a 2.5 billion share buy back and shares of jabil beating the streets on the top and bottom lines.
6:09 am
marvell technology going to reduce by 17% as part of a restructuring of the mobile business platform. >> janet yellen's comments driving today's market conversation. >> it will likely be appropriate to raise the target range to the federal funds rate sometime later this year and to continue boosting short-term rates at a gara gradual place there after as the labor market improves further and inflation moves back toward 2% objective. >> joining us now, he is rbc capital markets chief u.s. strategist and jonathan, our take on is is that the fed sounded dovish last week when they decided not to raise rates. it seemed to me like she came out with a much more hawkish stance yesterday. what's your take? >> when i'm talking to investors and looking at the markets, the market is entirely confused
6:10 am
here. what they got yesterday was, you know, number one, a clear path and number two -- joe you may disagree on this is that a moving forward raising rates is, in fact, what the market really wants. >> it was actually dovish what she said yesterday. >> i think the fed lost a lot of credibility by being all over the place and contradicting that yesterday. >> are you saying the market is going to go up on easier money well in the future instead of going up on normalizing rates? >> normalizing the rate environment is what the market wants. the market doesn't want life support. >> it's slow? >> yeah because the market doesn't want this to be disruptive. >> you're having it both ways. >> i'm not having it both ways. >> they wanted to go up slowly. >> the market doesn't want to see interest rates at 2.5% in
6:11 am
the next six months. would the market like to see the fed move a quarter point every other meeting? yeah i think they would. it's absolutely clear. >> fed futures. >> i look at a ten year bond yield. you could look at other things and it's clear on days when interest rates rise stocks go higher. it happens across all sectors and virtually all markets. >> did those guys wave? the policemen did? >> they're nice. >> new york's finest right outside. >> i wouldn't mind if they were just there every day at that corner. >> well, we can give a shout out to them. maybe we can get them to wave back in again. so jonathan, if you're looking at the scenario, we saw rates actually -- we saw stock prices rise here on anticipation. would you be buying into this or do you think it will be a lot
6:12 am
more volatility between here and now? while we're thinking the fed is a little more hawkish today, there's no guarentee. >> the most important story is you had a huge spike -- we should get the policemen in here to give their comments on the fed but the big story, this huge spike in volatility, the markets sold off by about 12% and you shouldn't get a bounce back not because conditions are better in the economy but simply because volatility naturally kind of comes back down to earth and things renormalize and stocks should move higher. >> but is it volatility heading up this direction. >> no, volatility should move toward something like 15. >> but you can have volatility and have the market rocketing back and forth but moving higher all the time. >> yeah, i think what you're going to see, i think conditions should normally come. what the fed did is they took an unsettled situation and threw kerosene on that fire through all of their statements but they
6:13 am
didn't fix this with one speech. >> great. >> thank you for coming in today. >> all right. >> he's fine. he's not coughing. he's not dehydrated. you got through that. but it wasn't a 40 minute -- >> the lights are are a little heavy though. >> the lights are bright in here. >> and we're not making him stand. >> in corporate news volkswagen is holding a news conference in germany. they're expected to announce new leadership. nancy is there with the latest. good morning. >> good morning, joe. and that's right, the vw supervisory board is meeting here at the campus as we speak and any minute now they are widely to announce that the new ceo will be the porsche ceo at the moment. this will be welcomed news for the community that has like all of germany and a large part of the industry been rocked by this scandal. he is a volkswagen veteran. he joined audi, 1977.
6:14 am
he got training as a tool maker so he's a product guy and into design and porsche has a fairly good reputation in the united states and he managed to double sales since 2010. all of that is good news for a company struggling to repair it's images in the united states. but others is just what other names are expected to role. who will follow professor winterkorn out of the door. some names could be the rnd chiefs at porsche and audi and also that michael horn will have to leave as well. we'll also be check out for additional information on where do we go from here. and there's more costs and more managing for this ceo. back to you guys. >> thank you. let's get more on volkswagen, diesel gate fall out but now i'm seeing carmagedon which is a rip
6:15 am
off. that's what was going to happen when they closed down the 405. it didn't happen. it's going to be tough for volkswagen to win back people because diesel buyers really counted on the low emissions and the power that they wanted. they'll be mad for awhile. >> serious car nerds and serious car loyalists. you have volkswagens, you have diesels, these are enthusiast cars for enthusiast drivers but the upside is these guys do have a built in loyalty and perhaps a patience with these guys. if the cars can be fixed and
6:16 am
volkswagen does it transapparently and you still get your performance and mileage. >> but that was the whole point. you can't get it which is why they took these extreme measures. bob lutz was on a couple of days ago saying for years they were trying to figure out how volkswagen did it. >> but they didn't install the system that is the secret sauce. it has been proven by the same people that busted them that some are in compliance and we're talking one element of pollution. on the global warming score they're still knocking it out of the park. >> but smog. >> i'll take the co2. it's the disgusting stuff that can kill you not 50 years now from. >> exactly.
6:17 am
i talked to the engineer that busted the scheme and he's con fireworks den that a software fix and not a giant reengineering of the car can fix the problem. >> a different software fix. >> a positive software fix. >> i try to figure out the slippery slope. you start small, you don't start out wanting to completely cheat the epa but you end up there somehow. is that how it is. >> it's a 30 year struggle here. it's this constant push-pull and the auto makers are under this intense pressure to dramatically lift fuel economy here and in europe and cheating has gone on for a long tile. this is just the most blatant example.
6:18 am
a few years ago hyundai was caught fudging their fuel economy numbers. they had to buy back numbers and give them a debit card for free gasoline you start thinking about the class action lawsuits for the 11 million cars i would be ticked off on 15 different levels. >> no one is dead. >> no one is dead but you can imagine that the fines are going to be hefty. >> absolutely. they're hoping for sure they can limit the damage to america obviously as much as possible and that's the thing that seems to be influx. >> 7 might be after tax. i don't know, do they get -- >> that was just for the us. now they're talking about other countries looking into it. that doesn't consider class action lawsuits from the people that bought these cars. >> right. would a lawyer accept a class action lawsuit just on epa
6:19 am
stuff? >> they've already been filed. >> they have? >> what am i asking would a lawyer -- what am i say somethi something. >> their point is probably going to be that the resale value are zero at this point. >> hopefully not zero but it all hinges on what kind of recall fix they come up with according to the engineer that's on this, it's a apology yantd sponge in your car picking up this pollution. you send a little more fuel through the system to burn it off. so you'll waste a little more fuel to zap out this pollution. so you're looking at a fuel miles per gallon decrease. we don't know how much. it's a car getting 50 miles per hour you're still talking a big amount but owners will still need to be made hole. you have damages there.
6:20 am
volkswagen needs to come up and change that corporate culture. they need to come out big and come out strong, i think, with a plan that really makes owners feel like they have been getting an apology and money on top of it to make themselves feel good again. >> do you know about bmw and porsche electric cars? >> absolutely. i test them. i drive them. that's all i do. >> that could be a problem for tesla, can't it? >> them jumping into the electric market. they have such a good image. >> not as good of an image as porsche. >> there's been a lot of talk about many other companies about really jumping into the electric game. we have been seeing it three to five years from now but they don't bring much to the market. they have a beautiful electric hybrid but it's a spectacular
6:21 am
sports car. whether they can bring that stuff to the mainstream. >> it will be 60 grand, right? >> no, kidding. thank you. >> very welcome, thanks. >> when we come back this morning, squawk hits the campaign trail. john harwood catches you with jeb bush. we'll get to that next. but first as we head to a break, take a look at this date back in history.
6:22 am
6:23 am
6:24 am
. >> john harwood has the latest edition of his speak easy series and catches up with jeb bush. >> governor, thanks for doing this. >> yeah. >> so in solidarity with your paleo thing i got the same thing. >> thank you. >> there's times i looked at you and i thought maybe you lost too much weight. do you think that might be -- >> no, trump has proven the point if you're loud and you repeat something over and over again you think that that turns it into truth.
6:25 am
this guy has created significantly more energy if you think about it. if you're overweight and not in good shape you can't sustain the kind of campaign i do. i campaign. >> for real. >> i don't just go down the elevator and have a press conference or stay in my room and call in. it should be arduous. you have to deal with putin. >> let's talk about economics for a minute. we had 12 years of reagan and your dad. 8 years of clinton, 8 years of your brother and now 7 years of obama. the only president who aver saw 4% growth in every year of a term in the last generation was bill clinton in the 2nd half of the 1990s after he raised taxes which many republicans said was going to tank the economy. just as they said about obama's taxes. >> when you look at the economy, no one is celebrating 2% growth except for the liberals. the new normal is reject it. >> bill clinton didn't reject
6:26 am
the new normal. he signed trade agreements. he was not hostile toward capitalism. >> do you think obama is hostile to capitalism? >> i do. i think he has a deep seeded belief that through government programs and through government regulation you can improve the social condition. i think that's his default place. >> there's been a lot of republican predictions in recent years that tax increases, obamacare was going to destroy the economy and with clinton the economy got better over the course of his term and with obama the economy has gotten better. it's not great but it's gotten better than it was. >> it's the worst recovery in modern history and disposable income. >> he inherited the greatest recession since the great depression. >> at what point do we start saying the dog ate my homework and it's someone else's responsibility. >> you once in describing your years in prep school said i was a cynical little terd. >> this is the second time in
6:27 am
the last week i've had to talk about my teenage years. >> i have got to think that the events that have unfolded in the campaign so far have revived a little bit of that cynicism. >> not at all. >> really? >> man, this is the greatest -- >> the look on your face in that debate stage when you're hearing the stuff from donald trump next to you that there's a look of disgust that -- >> not cynical. not at all. it is what it is. it's part of this angst that people feel. i can sense why he's a phenom but i think people want people with the skills and ability to lift them up and i'm not deterred by that at all. >> thanks. >> thanks for the dinner. >> you heard what jeb bush is counting on which is the long run. the run in which his $100 million super pack will kick in and try to bring back what jeb
6:28 am
bush and many republicans would consider normalcy to this race and a push on top is normalcy in the party so we'll see if that comes to pass guys. >> well, i'll kind of hurt because i don't really think you watch squawk box very much. i don't know how many times i tried to indicate that to you that the president is a little bit hostile to capitalism. i love your response to that as if you really were surprised that someone could say that. how many people need to tell you that before -- >> let put it this way joe -- >> i know you're at the new york times but you're also at cnbc. isn't that a bigger part of what you do now. >> yes but joe if he's hostile to capitalism he's doing a pretty bad job of it. look at what happened to the market over the course of his presidency. look at the recovery in the economy during his presidency. he, you know -- >> rhetoric doesn't count?
6:29 am
rhetoric doesn't count really? >> no, not really. >> can you pick an industry that hasn't been at some point disparaged? i can go over them for you. the oil companies, the insurance companies, the drug makers, the financial companies. you didn't build -- i can go on and on and on and i still don't see -- when you have a bully pulpit as the president to do something for jobs like tax reform and to end a lot of the fleeing of capital and manufacturing and all of the stuff that leaves the country because of our tax, you know, our inequitable tax rate, that's what i would have done to try to get better than 5.1%. we have a fed excerpt from 7 years in your recovery. >> joe. hold on joe. >> the worst recovery from any recession ever. >> you've gotten your best lines out. okay. hold on. >> i just like that surprise you had. >> there was a moment there in
6:30 am
early 2009 where if obama wanted to he could have brought that plane right down. why do you think he didn't? >> i just think if i were coming out of the worst recession as you just called it in hitters r -- rist ri. >> why didn't he bring it down? >> i don't know why he wouldn't have spent the first two years in obamacare which many people made it like that. >> 17% of the economy without a single vote from the other side. >> why do you suppose that? >> why do you suppose no republicans voted for it. >> if you want to explain the poisonous political environment we're in right now you don't have to go back any further than that. i'm glad he answered you definitively. i thought maybe if you took some notes that maybe you could go to school on what he told you. >> well let's put it this way,
6:31 am
joe, i also asked him about this, whether he agreed with limbaugh's characterization of the pope's economic views which is pure marksim. is that where you think obama is coming from. >> no. >> you're changing the subject. >> a lot more solutions are government based and not private sector based. that's the world we're living in now and that doesn't make for a successful economy. >> well, you're right on that. >> the private sector in growth will be the solution of income inequality. >> you mean like has been done over the last couple of decades. has the market involved it?
6:32 am
>> a lot of people are living a lot better than they were and this is across all economic classes. >> i thought you were talking about income inequality. >> income inequality, if you want to -- for the last seven years you can use the fed if you want. people with assets have done well because assets have risen because that's been the thing that we have been using. >> for a lot longer than the last seven years. in the last 30 years. >> i don't know. i don't think you throw that, growth policies don't work to generate prosperity. >> i didn't say that. >> well, i don't know what you're saying then. you're saying that growth policies prior to -- >> there's a range of policies, joe, within aaffection for capitalism that involve a little bit more or a little bit less. democrats and obama are on the little bit more side. republicans are on the less side.
6:33 am
>> you can look at anything through glasses like that. are you going to do a speak easy with hillary clinton. >> oh, yeah. >> you are? got to ask her about some of the stuff on the cover of your other employer, the new york times. i don't know about this. >> i haven't seen the paper yet, no. >> okay. >> i got up to hang with you. >> all right, john. love you. i'll see you at the debate. i gave you a few questions. can i give you a few questions. >> oh, yeah. >> yeah. >> okay. >> when we come back this morning, it is a slam dunk for nike. we'll break down the numbers that has the stock soaring this morning. stick around. squawk box will be right back.
6:34 am
this just in: 50 million customers' data was not compromised this morning in a security breach that didn't happen. wall street. not rattled. at all. no. not at all. not at all. i mean, look at the day. sir. sir. what went right? what went right? everything. thank you. with threat intelligence, behavioral analytics, and 6000 experts, ibm security will help keep you out of the news. my dad's company wasn't hacked today. cool.
6:35 am
oh. yes, hi. want to survive... ...a crazy busy day? start with a positive attitude... great. thanks. ...and positively radiant skin. aveeno® positively radiant moisturizer... ...with active naturals® soy. to help reduce the look of brown spots in just four weeks. i gotta go. and for gentle makeup removal... try our nourishing wipes to brighten skin. aveeno®. naturally beautiful results®.
6:36 am
6:37 am
welcome back to squawk box everybody. we're in chairs this morning looking through some of the stories that have caught our attention this morning and, joe, do you think there's any health benefits associated with going naked? oh, you picked the same story. >> do you know how i was going to start it? >> no. >> i was going to start it that when i was in germany, i told you this already, in that park in munich, many, many middle aged men -- >> why is it always the middle aged men -- >> i'm scarred. they were not in the greatest shape and they were naked and they're like this on the banks
6:38 am
of this river and have kids and we're riding bikes pass these guys and now they're on to something. there's a reason to be naked. >> there is. >> should i excuse these guys? >> maybe. maybe we should join the crowd. >> nudists have had something. >> for a number of years that we didn't realize. >> it has to do with vitamin d intake. you know how important vitamin d is. >> sunshine on your skin. >> supplements don't work. >> your body doesn't absorb them the same. >> the way to absorb it the best is to absorb it by getting done on your entire body. >> i always thought about that though. there are areas of my body that have never seen the light of day and i don't think would do very well. they burn very quickly. they might be tender and there's areas you definitely don't want to sun burn. >> i have a fence around where i am now. >> oh, no! >> and if i wanted to -- >> it's not just the vitamin d. it's better for your skin they say because clothing can create
6:39 am
all kinds of wrinkles so they suggest that you sleep nude. >> your body is supposed to cool to 65. >> and it's better for you in terms of promoting the food fat which steps stave off diabetes. >> i copped to kevin plank yesterday -- she was a woman that became an author an an amazing person and she figured out some way with livestock where you make them feel very safe. and i understand that feeling where you can -- and at night that's what i want -- >> when you're cradled the right way. >> when you're cradled. >> with clothes. >> i want them to be cradled the right way. >> with your underwear. just buy it. the insideline on nike. shares of the dow component
6:40 am
jumping. we'll get reaction from the street next.
6:41 am
excellent looking below the surface, researching a hunch... and making a decision you are type e*. time for a change of menu. research and invest from any website. with e*trade's browser trading. e*trade. opportunity is everywhere. (vo) wit runs on optimism.un on? it's what sparks ideas. moves the world forward. invest with those who see the world as unstoppable. who have the curiosity to look beyond the expected and the conviction to be in it for the long term. oppenheimerfunds believes that's the right way to invest... this big, bold, beautiful world.
6:42 am
6:43 am
>> strong fwroeth growth in chi. up 23%. was that total future orders? >> future orders total we're up 17%. >> total in china. >> china was up over 20. >> over 20. >> that's what people used for years. >> it seems really high. >> much higher than we
6:44 am
anticipated. we upgraded it this morning. it's all about their brand. what they do better than anybody else is control their brand and build their brand and it's about a $4 billion business give or take in china. so it's about 12% or maybe more than their total business and there's so many people there. they have a huge opportunity and finally anchored the brand. >> 2.8 billion feet. have you done that calculation. >> i heard you earlier today. >> so my math is right. they do it all early. >> how do you build a brand other than with people like maria sharapova or something like that? >> they know who their customers are and different retailers do certain things well in europe and other ones do certain things well and they control that in an
6:45 am
incredibly good way. >> how do you control your brand in china? we heard about iphone stores knocked off. >> they were getting a lot of knockoff in their apparel because they weren't tying it together. they go head to toe about running or basketball and the consumer is knowing what's real and what's not and marketing around that to support it to the appropriate customer. >> nike is not going to rollover for kevin plank and under armour are they? >> no. >> big enough market for everybody. >> and adidas is struggling so benefit there as well. >> i mean, the market cap, how big is under armour compared to nike. >> it's a fraction. >> there's plenty of growth there. they're doing a lot of the right things. >> certainly they are.
6:46 am
they're talking about getting into sports ware or life style businesses overtime and only about 12% of their business is international so they have huge opportunities there as well. >> so in the past, the question with nike is can they keep on this pace and i can remember asking that question 5, 7, 8 years ago and it just keeps happening but now it's china. >> nike is the best grass roots company out there. i don't mean by marketing. i mean going out there and sending their sales people and marketing people out there and i speak to a lot of retailers and they say they see someone from nike once every two weeks or so and that information ends up rolling up into the corporate business so they know exactly how to target the consumer arguably better than anybody a lot of other companies end up doing it top down and struggle with that approach. >> is there any products they need to expand?
6:47 am
or geographically at this point? >> they need to keep innovating with products. so when you go to a store and you see stuff and you go got it, got it, got it, boring, boring, boring nike is innovating so they say don't have it i need it even if they have a closet full of shoes. >> thank you. >> thank you. >> when we return today, what do bill gates, beyonce and le leo decaprio all have in common? they'll all be rocking in new york this weekend at the global citizen festival. the goal is ending extreme poverty by the year of 2030. two of the organizers behind the event will join us right after this. opportunities aren't always obvious. sometimes they just drop in. cme group can help you navigate risks and capture opportunities. we enable you to reach global markets and drive forward with broader possibilities.
6:48 am
cme group: how the world advances. they speak louder. we like that. not just because we're doers. because we're changing. big things. small things. spur of the moment things. changes you'll notice. wherever you are in the world. sheraton.
6:49 am
6:50 am
leadership, how to achieve it, how it's changed. >> engagement is the starting point is the starting point of every single winning company.
6:51 am
>> micromanagement is vastly undervalued. >> as a ceo, you get to a destination, you zig and zag. >> you need a mission. >> volkswagen, what would you do? >> people are forgiving if you come out and say, look, we missed up. >> a place where truth and trust did not exist. >> it's about how the consumer trusts you. tomorrow, more than 60,000 people gather in new york's central park. the global citizen festival promises a star-studded lineup like beyonce, cold play, and a special appearance by facebook's ceo, mark zuckerberg. the organizers hope to send a message about ending extreme poverty by the year 2030. joining us on set is the president of entertainment enterprises for i heart media, and also hew evans, the ceo of the global poverty project, both working to the to pull off the festival, and, gentlemen, thank you, both, for being here. >> thank. >> hugh, talk about the goal, ending extreme poverty by the
6:52 am
year 2030, an incredible goal, particularly, considering we have not made massive amounts of progress towards us over the last 30 years. >> we have. what we've seen since 1981 the portion of people living in poverty halved from 52% of the population down to less than 20% today. we've seen halving of extreme poverty while i've been alive, and child mortality rates halved. >> and bill gates pointed this out in terms of progress made, but in 15 years, that's amazing. what has to happen in order to reach the goal? >> a couple things, ensure that all girls get a chance to full 12 years of quality education in the world. we need to ensure that vaccines and immunizations are available so children do not die before 5 years old. ensure maternal health so women do not die in childbirth. we need safe and clean drinking
6:53 am
water. >> these are all, you know, you just -- the perfect list of things that i think are on the back burner because of this -- this is political, but because of an obsession on c02, but i work on any of these projects that you're talking about long before -- and there are some that say if we continue to focus, and i don't know how much of your -- what is it? a concert or something, how much focuses on c02 or climate change, whatever, but these are here and now. >> absolutely. >> vaccines, water, women getting an education. >> they are. it's about survival. >> rather than pie in the sky. right here in new york. >> right. >> i've been on the board for 20 years, and what we see, 50% of children born in new york are born no poverty, here in new york city, so imagine africa. >> looking in this country, poverty, and how we've not been able to fix the problem yet. seems like a daunting task.
6:54 am
>> amazing. here in man hat p, park avenue, the mercedes going to work every day, a few miles up in the bronx, they are worse off than appalachia. there's an imbalance in the country, but it's doable. we've raised over a billion in robin hood and fighting poverty. what hugh is doing in the commitment by 20 30 is amazing. what he's doing on saturday are megaphones to fight the problem. he's not raising money on the concert that day, but it's the messages sent out. >> people are so dissporesponde and negative about the current state of the world, but the numbers you just gave, and that was generated through economies that are working, was it not? i mean, that's how it happens. capitalism, love or hate it, this is a result of the global kmi moving forward, is it not in. >> i believe that you need two things. you need sustainable economic
6:55 am
growth, which you saw in east and southeast asia, millions of people lifted from poverty from korea to china. you need a combination of the enabling environment for economic growth. that enabling environment you saw in south korea post the war, where you saw that the u.s. government invested in health and education. you had a highly educated population also really healthy, even though they are extremely poor, already, when the technology was decanted from japan, ultimately, the economy grew. that's because the population was healthy and educated. that's what we need. >> look what happens in the middle east -- >> yeah, security. >> i mean, it peoples like we are in the midst of a setback, it may be short term, but watch what happens in the middle east and millions of people leaving, forcing to flee -- >> absolutely. i mean, when you have conflict, you're never going to be able to alleviate poverty. that's the challenge. >> when you have isis or afghanistan falling into the hands of the taliban, you can't
6:56 am
educate women either. >> absolutely. >> there are things we have to do as leaders in the country to affect change in what you're trying to do as well. >> what we have now for the first time, and you touch upon it earlier, is technology. technology can change a lot. you can deliver a lot more clean water. clean water kills more than anyone knows. >> you need screens on the open pits of the -- >> ray chambers with bed nets, $5 bed nets. >> vaccines, what do thiey cost? >> 30 cents. it ensures a child never suffers from a crippling disease, and it's 99% eradicated, but it's in the conflict zones where it's the hardest to reach places. that's what we're focused on. this weekend at the festival, it's not just awareness, but we want to advocate for change and see world leaders step up. we announced yesterday vice
6:57 am
president biden and the first lady will be in attendance. we're excited to see that the u.s. government is putting their money where their mouth is and step up on the issue. >> i think what hugh has done, there's many events over the years. proud of you, son. ge! a manufacturer. well that's why i dug this out for you. it's your grandpappy's hammer and he would have wanted you to have it. it meant a lot to him... yes, ge makes powerful machines. but i'll be writing the code that will allow those machines to share information with each other. i'll be changing the way the world works. (interrupting) you can't pick it up, can you? go ahead. he can't lift the hammer. it's okay though! you're going to change the world. awe believe active management can protect capital long term.
6:58 am
active management can tap global insights. active management can take calculated risks. active management can seek to outperform. because active investment management isn't reactive. it's active. that's the power of active management. i'm watson. and today hundreds of companies are putting me to work. i'm teaching watson to help your vet speak dog. you're a dog, right? i'm teaching watson to help you make healthy choices. i'm teaching watson to help design a vacation around your personality. don't judge. i'm teaching watson to answer endless questions. how big is infinity? where do babies come from? why can't i have chocolate for breakfast? i'm watson and i'm ready to work with you.
6:59 am
7:00 am
futures surging, europe finishing with big gains. do investors have fed chair yellen to thank for what looks like a big friday rally. >> we'll debate that straight ahead. pope francis, thousands lining the roadways, waving flag, snaps pictures. what's on the agenda for the pontiff and a live report coming up. it's not a party until someone drops the bass. ♪
7:01 am
and that bass means billions for the fast growing electronic music festival dance scene. get your groove on. the second hour of "squat box" begins right now. ♪ live from the beating heart of business, new york city, this is "squawk box ." >> megan -- it's new out now. >> all right. i'm joe kenan with becky, and andrew is off today. waking up to green arrows, so did europe across the board. nice moves higher than the averages here after a stabilization yesterday, looked
7:02 am
to get ragged there, mid session, we came down to the double digit losses, and now we're up today, and people tie it to fed chair janet yellen and her speech yesterday saying it would likely be appropriate to raise rates from 0, in her words, sometime later this year. >> that it will likely be appropriate to raise the target range to the federal funds rate sometime later this year and to continue boosting short term rates at a gradual pace thereafter as the labor market improves further and inflation moves back towards 2% objective. >> i guess for people that thought that part of the fed's calculus last week was that the u.s. economy just isn't strong enough yet, when you hear that, it sounds like she's expecting the the economy to stay where it is or improve. >> sounds like she has faith. >> the rate hike would then
7:03 am
indicate that the fed believes that the economy's in better shape, and maybe that's why you buy the market. >> perhaps. >> we're sick of the easy money. i think we've gotten enough, you know, the bang for our buck is -- >> we've been saying that for a couple years, but, yes. >> diminishing returns at this point. would be nice to have the economy in better shape. more on the markets in a minute. but, first, becky -- >> thank you, joe. >> has some of the corporate story. >> smooth handoff. well done, anchor man. >> after 20 year, that's what i can do now. >> joex way again company dealing with a scandal expected to announce new leadership. they are following the story and we'll keep you up to speed. the new apple iphone 6s is out today. fans lined up for the new device, analysts forecast 12 million phones fly off the shelves this weekend.
7:04 am
nike's quarterly results topping estimates despite fears of a china slow down. sales in china soared 30% believe it or not, nike calls the china numbers amazing. alask also, shares of the dow component is a gain this morning to $124 a share. joe, back to you. >> thank you. you know what i have here, going off here. i have a -- he was right. i have, for this new ios thing, i got an update that i have to do. >> now it's fixed and will update. >> can we roll back the tape? >> this update contain bug fixes. >> you never download the first new software. >> i listened to my son who is right, on top of this stuff, and now i am paying the price, but now, anyway, i got -- i think i need wifi, right?
7:05 am
>> yeah. >> all rit. unless i can ask everyone to wait while i do that? that's not a good idea? probably not. futures jumping, good news for the bulls after the dow closed down five out of the last six sessions, but had nothing to do with the fed not raising. would have been worse if the fed had raised. i swear. joinings now, lou green, brw trading group strategist. do you think it was a coincidence the market went down thursday, down friday, rebounded, and rebounded monday, but then down tuesday, wednesday , thursday. is that a coincidence from not raising? >> no, i don't think it is. the way they didn't raise was confusing. they presented or yellen during the press conference presented arguments about inflation being a longer term project and things that take a while to play out, presenting the idea that the emerging markets in china were very troublesome, that, you
7:06 am
know, chinese leadership did not look up to the task, another thing that would probably take a long time to settle. and then said despite those things, yeah, october, december. i think it was this mismatch. i think i wrote that the fed kind of creeped the market out. well, what are they talking about? they are not raising because of concerns which are real concerns, yet they could do it in october. as you said, the thing with yellen's speech yesterday is that it expressed confidence, but at least it gave the markets certainty that the mixed message from the fomc press conference, you know, put that behind you now. i think it's beginning to be a difficult task to -- for the fed, you know, at this stage. it's going to be difficult because, you know, central banks around the world are easing and have stimulus programs at the same time the fed wants to pull back, but the stock market has depended so much on the fed and the increase in the balance sheet, and every time balance sheet has not increased, it's
7:07 am
troublesome for the stock market. >> we need to change that. i wish i believed that the fed really had a good grasp of a rules based reason for doing things, but it may be no more complicated than market reaction to some of the moves, and in the past, like pavlov's dog, every time they do qe or cut rates, the markets go up, and say, well, we're conjuring animal spirit, and the economy will eventually catch up. now they finally did it where they didn't raise, and the markets sold off, and now they indicated they are hawkish, and the markets are up. now will we be able to change their mental di aboity about thr thing to do? will they change now and realize that if we raise, maybe the markets do better? >> no. >> no. >> they won't. >> no, i don't think so. the things that yellen spoke of last night, the things she's very consistent in her view on inflation and how stronger labor
7:08 am
markets are going to push inflation through. i mean, the central bank says at the end of the day, they can control inflation one way or the other, and i think that's problematic at this time. i think one of the things that has happened over the last few years with the advent of the shadow of banking, et cetera, is that the long end of the market no longer reacts to the fed because the fed no longer has the control of that monetary base. it's no longer that direct reaction, but the -- it reacts to how the fed moves affects the economy. inflation expectations. >> lou, that's scary. if they lost control, the markets can take back control, and it's not pretty when they finally do. >> it gets scary, and that's one of the tricky things going on here is that the ten year yield right now, i don't know what it is this morning, call it 215- 220. >> that's about right. >> is not moving up at all in expectation. during 2004-2006, it moved up in
7:09 am
anticipation of fed move, but did nothing. they went up 20 25 point, and from that point, they moved 40 basis points. >> will be interesting because she says object, at least this year, and if there's another event and they don't do it, that shows you that, you know, it's tough to get out once you get in. >> oh, absolutely. now the suggestion is did they delay because of stock market volatility? >> i know. >> or the potential looming shut down of the federal government or because -- >> yeah, right. >> or dollar strength. >> at what point does mop tear policy have to be set regardless of other things. >> exactly. rule base. >> 1800 on the s&p for whatever reason in the october meeting, is that another reason not to do it? >> 4% unemployment, we get down to 4, and cypress has another scare, and, oh, no, no, not
7:10 am
because of cypress. okay, lou, thanks. >> thank you. >> all right. we have an update on yellen this morning after a health scare at the end of the speech last night. check this out. she appeared to pause and cough multiple times. she was offered help to leave the stage, but ended up walking off under her own payment. she felt dehydrated, under bright lights, it was a 40 page speech. she was standing for quite a while. as a precautions, she was seen by staff on site and continued the schedule and moved on. seemed to me she cut the speech because -- >> looked like it. she looks like she was not stable right at en. i don't know, maybe faint almost. >> dehydration does that to you when you stand for a long time like that. >> right. in washington today, president obama will welcome chinese counter parts for an official state visit. cnbc's chief international correspondent is at the white
7:11 am
house with the look. you've been all the way through back to washington. what do you have this morning? >> reporter: the chinese president arrived late yesterday afternoon, welcomed at andrews air force base by vice president biden and his wife, jill, and there was a dinner at blair house that included national security adviser, susan rice, and treasury secretary jack lew and the vice president as well. this arrival here on the east coast comes after spending two days in seattle with high level meetings, meeting with bill gates, mark zuckerberg, who posted on facebook he spoke to the chinese president entirely in mandarin, reporters who were at the scene say that conversation lasted a minute. facebook is, of course, banned in china. we didn't get clarity on what they talked about, but maybe that was one of the issues. you'll appreciate this irony. although it's banned in china, the president has a verify visit
7:12 am
page on facebook highlighting what happened on the trip here, and, certainly, there are going to be a number of issues brought up including whether it's cyber security, whether it's the expansion of the islands in the south seas, businesses' ability to do business in china, being more open, hence why you certainly have jack lew included in all discussions. here's the schedule for what's going to happen today. 9:00 a.m., official welcome on the south lawn. 10:00 a.m., the president's going to hold a meeting in the oval office, 11:00 a.m., a larger meeting in the cabinet room, and at noon, the moment of high drama. joint press conference where the president xi agreed to take two questions from the american paid ya, potentially. china watchers in seattle were skeptical this would happen. but we've been told that the president of china agreed to this so people want to see whether or not this happens where he takes questions from american journalists.
7:13 am
he did it in november of 2014 in beijing, taking a questions from the "new york times," but this will be an incredibly rare moment and speaks to the issue of freedom of the press in china, and, certainly, guys, when we were in seattle, the way we were treated as american journalists by the chinese con sin gent was incredibly different, controlling, restrictive, and things that you wouldn't normally expect as an american journalist working in the united states. >> i want him to take a question from the "new york post," not the "new york times," that will be a softball. >> on their side, right? >> like-minded, oh, god, everything's great in our communism country. i'd love to see the "new york post" question him. >> michelle, is there any -- if they were to take questions, are they random questions, or is it something the outlets were chosen in advance? >> reporter: that's a question about how the white house
7:14 am
chooses who gets to ask. i'm not privy to that process. i won't be in the room, for example, they keep it to the white house press core, so i'm not sure. the thing is, there are so many questions you could ask the president of china that would be controversial. i mean -- >> right. >> harder to think of one that's not controversial. >> exactly, exactly. yeah. >> michelle, stay with us. let's bring in our euroasia groups. david, there's an article in the "washington post" today laying out that the romance between president obama and president xi jinpeng ended. president obama tried to woo time, spending time with them, but everything china's done when it comes to the cyber attacks on corporations here, maybe caught the president offguard, our president offguard, and as a
7:15 am
result, the meetings will be kor jill, but a little chilly as well. is that your understanding of the situation? >> yeah. i think for president obama, he's come off tdays of extremel warm meetings with the pope. so he had his two days with the holy father, and today is the day of the unholy father, and, personal relations between obama and president xi are not good. relations between china and the u.s. are chilly at best. on the other hand, both leaders know that each side needs the other, so they are both going to sort of put a brave face on this and try to make progress, and i think there will be some progress, but i think at the interpersonal level, this is a very cool relationship and i think we're dealing in xi with a new chinese leader who is on the
7:16 am
one hand sees china as a great power. on the other hand, i think is very worried about what's happening in his country, how china's whole role in the world is going to play out. in some ways, it's a less confident president xi than the one that president obama first met a couple years ago at sunny lands in california. >> what does that mean in terms of what we may get out of the relationship? obviously, xi is getting what he wants, a state reception and standing on the world stage and being greeted like this. what can president obama expect to get in return? >> yeah. so i think the two areas where there's likely to be the most progress are on climate change issues that the chinese and the u.s. really have come to something of an understanding. yesterday, the chinese announced to move to a cap-and-trade system that will, i think, build
7:17 am
moe m momentum heading into the climate summit in paris. the other issue i think there is a chance for real progress is cyber where the u.s. put on hold this move to sanction chinese companies. i think we are not going to hear very much publicly about this. this is probably going to be an understanding that we're only going to learn about if the sanctions end up not happening over the next month or two after the xi visit ends. have the chinese leader and president obama come to some agreement on boundaries and on some confidence building measures on cyber. i don't think there's going to be a lot of progress on the south china sea or the east china sea, and on these economic issue, i just don't know what president xi can say that's going to have real credibility in the markets. yeah, jack lew's at the dinner.
7:18 am
chinese say the right thing, but i think the market is now very, very skeptical. >> david, thank you, and our thanks to michelle caruso-cabrera as well. >> thank you. quarterly results from blackberry on the same day that the iphones hit shelves. smart phone survival of the fittest when "squawk box" comings right back. opportunities aren't always obvious. sometimes they just drop in.
7:19 am
cme group can help you navigate risks and capture opportunities. we enable you to reach global markets and drive forward with broader possibilities. cme group: how the world advances.
7:20 am
7:21 am
that is traffic in new york city right now, doesn't look bad considering the folks here. the people are taking advice to stay off the streets. welcome back, everybody. we are watching shares of blackberry this morning as well. the company reporting a quarterly loss of 13 cents a share, 4 cents wider than estimates, and revenue short of analysts' forecasts, and the stock dropping 7% this morning. a programming note, don't miss the ceo of blackberry live on "squawk alley" at 11:00 a.m. eastern time. when we return, the pope here in new york city, find out the pontiff's agenda and second leg of the trip to the united states. we'll continue after this quick break. now for today's aflac trivia
7:22 am
question. what was the first motorized vehicle for deliveries by ups? the answer when cnbc's "squawk box" continues. aflaaac. aaaa-flaaaac. someone's sandbagging. i'd be tired too. he paid my claim in one day when i got hurt. one day? serious hustle. serious duck. in just one day, we process, approve and pay. one day pay, only from aflac. ah!
7:23 am
awe believe active management can protect capital long term. active management can tap global insights. active management can take calculated risks. active management can seek to outperform. because active investment management isn't reactive.
7:24 am
it's active. that's the power of active management. big day? ah, the usual. moved some new cars. hauled a bunch of steel. kept the supermarket shelves stocked. made sure everyone got their latest gadgets. what's up for the next shift? ah, nothing much. just keeping the lights on. (laugh) nice. doing the big things that move an economy. see you tomorrow, mac. see you tomorrow, sam. just another day at norfolk southern. now the answer to today's
7:25 am
aflac trivia question. what was the first motorized vehicle for deliveries by ups? the answer? a model t ford. ♪ second half of the pope's u.s. trip begins today with the packed schedule in new york city. our mary thompson is joining us now with more outside ground zero. good morning. >> reporter: good morning. later this morning the pope is meeting with the families of the victims of 9/11 at ground zero, and then he'll attend an interfaith event, baes icalsica keeping with the request we speak with others, engaging in dialogue in order to solve the problems of the country's, the problem that this country and other countries face at this time. before that, though, the pope will be addressing the u.n. general assembly, likely to call, again, for action to combat climate change, given they will adopt the agenda
7:26 am
versus the sustainable development. in the afternoon after a trip to ground zero, the pope visits a school in east harlem and takes a motorcade in central park to the madison square garden for a mass nor 20,000 people. this follows his address to congress yesterday urging lawmakers to revive a spirit of cooperation that's served the u.s. so well in the past. >> we must move forward as one and renew solidarity, cooperating generosity for the common world. >> reporter: of course, this is a massive security event. the police department erected 37 miles of barrier and 800 tons of concrete barriers. the pope is expected to travel 57 miles, so it is expected to be a bit of a traffic nightmare,
7:27 am
and gimven the u.n. general assembly is in session as well, the nypd expects 220 motorcades. take the subway, back to you. >> okay, mary, mary thompson, good to see you this morning. coming up, it is carmeggadon at voex weigh again.
7:28 am
7:29 am
7:30 am
welcome back, everyone. this is cnbc, first in business worldwide. among stories front and center this morning, we're an hour away from the third and final reading on second quarter gdp, expected to show an annual growth rate of 3.7%, identical to the last rating we got. president obama is hosting chinese president xi at the white house today. the meeting is followed by a
7:31 am
joint conference at noon eastern time coming amid tension over the alleged cyber spying by china on american corporations. fed chair yellen is said to be fine this morning after receiving medical attention after her speech yesterday afternoon. towards t towards the end of the speech, she lost concentration several times attributed to dehydration. volkswagen's new ceo expected to be announced today. for more diesel drama, let's bring in the former president of chrysl chrysler, a cnbc contributor, and, bob, great to have you here today. bob? >> yeah, good morning. >> okay. good morning. you know, we've been trying to get arms around this. somebody in the industry for years and years, i guess the question is, can you really do clean diesel, or is the entire theory just a fraud after what we've seen happening here? >> no. i think other than the problem of 11 million volkswagen
7:32 am
worldwide, which had been designed to not quite pass with a minimum of cleanup equipment, the more expensive diesels both audi, porsche, bmw, mercedes, the gm ones, those are fully equipped with tanks and nox reducti reduction equipment, et cetera, et cetera, but it's very expensive. diesel hardware in porsches will be produced and sold, but what's increasingly infeasible with diesels for the low end volkswagens. >> was this is a frustration to you in your time at gm watching what volkswagen was doing and try to figure out how they did it? >> well, yeah, i always asked how come volkswagen can do it and we can't? we can't answer the question, we
7:33 am
don't know, but we think they got a waiver from the epa or from car and honda asked the same questions. they could not figure it out either because with near identical engines and hardware from the same suppliers, they could not get themselves to pass, but make no mistake about it. this is about the worst situation that any automobile company could be in because there really isn't any any way make those 11 million engines run on the legal cycle as well as they ran on the illegal cycle, so even if the fix is to make the engines run on the program that passed emissions in a static situation, those cars are not going to run as well. they are not going to have power. they will not have the fuel economy. they are going to face, you know, lawsuits for loss of value, et cetera, et cetera, and this is 11 million cars
7:34 am
worldwide, so this is going to be incredibly expensive. it's just without question, i mean, i -- i have to say i almost feel sorry for them because if i were the new ceo of volkswagen, i wouldn't know what to do next. this is bad. >> you feel sorry for them, but it's self-created, i don't know how they got to the path where it's outright lying. >> well, as somebody said to me this morning, this is one of the situations where you ask yourself, what were they thinking, but i'll tell you, under the dictatorial my way or the highway type of person, who is constantly firing people, threatening people, you better succeed at this or you're out the door. when you got that culture where
7:35 am
they fear for his or her job, and he said, you succeed at this or you're fired, frankly, people will lie and cheat in order to do what the boss expects, and that is the danger in that type of culture. those cultures can be very effective in driving results, but they can also result in people taking shortcuts and cheating because they don't want to disappoint the boss. >> certainly a management lesson for the books, bob. >> yeah. >> beyond that, you think that this is something that is volkswagen centric, though? there are rumors, and people are looking around at other companies that are able to do this, and you say this is really just a vw situation? >> i think it's vw and contained to the four cylinder cars, which, of course, the most common, but i think the six cylinder audis are fine. i think the porsche engines are fine.
7:36 am
bmw has stated in independent experts agreed that bmw engines pass. there's no reason to -- i mean, that gm-europe, we were always simon pure in this stuff and make sure we pass the with a good margin so i think this is contained to volkswagen, but in a larger sense, diesel is being legislated out of existence because the emission requirements for diesel are becoming so erroneous, and i've been saying this for ten years, diesels almost no longer make any sense because, first of all, you got about $2,000 cost penalty for the engine, and then you've got another $4,000 penalty for emissions equipment. you almost, like, got a chemical factory embedded underneath the car, and you have to take a tank, liquid u ree ya with you that has to be filled up every thousands miles.
7:37 am
it's a nightmare. it's to the point where the fuel economy game is not worth the extra expense anymore. >> we called it a blatant attempt by management to cover up something that's a huge problem, but what's the difference with this situation and situation at gm where people are actually dying because of problems that was not known was not fixed? >> well, wait a minute. the reason the epa and european authorities regulate diesel emissions is because it has believed that diesel particulates and nitrous oxides kill people in great numbers. if that were not the case, we wouldn't have emission regulations. well, the difference is while the gm ignition switch was tragic, but it was -- there was no management intent to skimp on ignition switches or to put in
7:38 am
in bad switches or hide the effect we had ignition switch problems. this problem was covered up and contained by one engineer who had released that switch and when we started having troubles, he did not report it, and don't forget that gm went to them data, saying we have an ignition switch problem, what do you think? the government said, oh, we don't see a trend here, don't worry about it, you know, don't issue a recall just yet. what we keep forgetting here is that gm misread the signals, but the government misread the signals too. that was tragic. it was a lot of people messed up, but it wasn't a deliberate willful act of deception. that is the huge difference here. >> can you talk to the pope's people maybe and he's -- you've
7:39 am
seen him squeeze in and out of the fiat, how tired he was last night. they brought the fiat in over here, imported it to ride around in that thing? he doesn't need a rolls royce, but a buick with leg room. you see that thing he's riding around in? >> i didn't see it, but -- >> it's look like a smart car. >> it's a fiat. >> handlers are in there, squeezing into this sardine thing, and it goes, and coughs a few times. sputters. what about a buick? >> well, the pope makes a lot of anticapitalist and anticonsumer comments so he wanted to -- >> a fiat is not anticapitalism, that's just stupid. >> we're talking about the black fiat. that's not anti -- that's just making a bad decision. no, i'm kidding, bob. i figured you have some car for
7:40 am
him, though, you're a car guy, what can we get him in? what can we talk him into, you think? oh, i think -- well, i think in the united states for heads of state, obviously, cadillacs are highly appropriate. >> you're right. no. we go with the anticapitalism there. i think buick. buick. like, just a sedan. four door. >> yeah. that would be well received in china as well. >> exactly. [ laughter ] all right. thanks, bob. >> thank you. coming up, netflix using big data to calculate what content you want to see and trying to figure out exactly when you get hooked on a show. they use big data to make sure they never have the movie i want. really, they do. think think it's a movie i want, they have other movies like the movies. i never found a movie. i never found a movie i want to watch. >> because they don't have a
7:41 am
lolot from 30 years ago. >> oh, oh, oh, okay. that's an andrew slam. >> i have to fill in for hem today. >> yeah, you do. doubling up, and the economics behind electronic dance music vest falls, d.j.s paid millionsmillions, and the is worth millions. the money behind the festivals and why millennials love them, stimahead. hey! hi! our cloud - it's a platform based on awesome-ization! really? can it keep our data where it needs to be no matter what country we're in? integrate with our systems to help keep transactions secure? combine customer data with likes, tweets, the weather, to predict trends? that would be awesome. tote? now there's a cloud that understands business. now there's the ibm cloud. which means you can watch movies while you're on the move. sitcoms, while you sit on those.
7:42 am
and even fargo, in fargo! binge, while you lose weight! and enjoy a good cliffhanger while you hang from a... why am i yelling? the revolution will not only be televised. the revolution will be mobilized. introducing the all in one plan. only from directv and at&t.
7:43 am
7:44 am
welcome back to "squawk box," everyone, if you have a story to share, an article buzzing on this friday morning, send it to us. we might talk about it later in the keep squawking segment. share on facebook or tweet us about it, and you see the addresses there. keep squawking with the #or squawk cnbc on facebook. the stocks this morning, finish line earnings matching estimates, but revenues fell short. box upgraded from buy to hold. a recent slide in the share price and new functions that make the company's cloud services more attractive. the stock is up 1.5%.
7:45 am
3m up perform from neutral after the credit squeeze. there was a drop in the stock and more favorable outlook compared to the defensive stock years. joe? binge watching point of no return. netflix uses big data to notify viewers getting hooked on show. they analyze data from over 50 million subscribers to discover how many episodes it takes to move from oning watch episode to nonstop viewing of the entire season. joining us to discuss the technology behind netflix, buzzfee's senior tech writer. i know this works. i saw breaking bad, sons of anarchy, that was correct, and then solve was four, and i didn't make it to four. >> how many licks does it take to get to a tootsie pop. >> right. >> yeah. it's amazing how much data they collect, and then how many
7:46 am
people work on this. they have hundreds of people at netflix, and if you go on the jobs page right now, there are probably 45 data and engineering jobs. i mean, they love to have data. >> they know that "breaking bad" is one, what do they do with the information? >> what they do and what some people love and others find a little distoepian is they use the data to engineer shows. "house of cards" has everything from the color pal let to, you know, the idea of we're going to go out and buy the show about political intrigue and, you know, the idea of a strong female lead who they created all these different microgeneras and sub categories. >> so then they are going -- that would seem to indicate, this is just one thing they do, but they will be content generators more than just a means for me to watch? >> oh, absolutely. >> that's definitely the goal? >> they have tons of original programming, and if you go on
7:47 am
there, you see it has more than doubled in the past couple years, and, you know, i mean, they really understand what people want, and they can go out there and shop. >> they don't give me what i want. they don't. i think that the old netflix, couldn't you, if you paid for the monthly fee, couldn't you order any movie and they send it to you, you watch it, and they send it back? >> yeah. >> there's a lot of movies i want to show my kids. i never found one i can watch on netflix. i get old reruns of whatever and watch those, but with that $9 a month, whatever it is, i can no longer find a movie that -- do i get it sent to me? >> yeah. >> they changed it. why can't i pay to watch something for $3? >> the licensing issues that they have worked out are complicated, and i think that there are still people that lag behind a little bit -- >> lag behind in terms of
7:48 am
technology? >> in understanding -- >> the culture. >> learning how to work this? >> and, honestly, you know, for -- >> how do i watch movies i want to watch. >> amazon prime. grab your apple tv. >> i got xfinity, i find them there on comcast. i find them there. i don't mind paying, but i want it, and i can't get it. >> reality is i think with things -- >> it's stupid. i'm mad. >> with apple tv and roku and these devices -- >> i don't know what that is. >> netflix is one part of that sort of cord cutting pie. >> you talk about the cord cutting pie, you have to add the other stuff so you're back to the same pricings, it's not cheaper. going back to what you talked about, reverse engineering some of the content that's out. i understand why they are doing it. seems like everybody in business is trying to find a better way to use data to really make sure we're smarter about how to do this. my guess is people who push back are creative content people who think, no, this is any art form,
7:49 am
and this is how i do it. you're not going to tell me i have to do x, y, and z. it's robotic at that point to knock out -- >> well, there's both there. i mean, "house of cards" was not necessarily engineered in a laboratory by data scientists, but it was purchased. you know, you can go through, and it sort of helps the people who are, you know, acquiring new show, and, you know, determining where they want to put the resources. >> to figure out in advance? >> it's a research in filming department, essentially. >> have you got a good handle on why networks seem to be lagging behind the ability to have a huge cultural hit? >> well, i mean, it's hard given the constraints of -- >> like cursing, sex -- >> what you can do on nbc, abc -- >> you need stars to sign on to 20 episodes rather than signing on to six or eight or 12, but
7:50 am
the -- i'll let you finish, but it's to assume that amazon, assume netflix, and to assume all content providers are not going to run into the pilot that does not work and all that money. it's hard to develop a hit. they are lucky. amc has breaking bad, mad men, walking dead. sooner or later, they'll come up with joey or something that they spent money on that does not work, aren't they? >> i think that that's true. there are shows on amazon and on netflix that sort of don't, you know, make it into the conversation in the same way that "house of cards" does, but you see there's a lot of of money thrown behind it, and, also, you know, netflix can say, oh, we'll have you for 12 episodes, and so we're only going to take 12 episodes of your time. if you go on a full run on network, that's 24 a season. that can be really difficult. i think the demands are, we're going to build something, we're
7:51 am
going to throw, you know, sort of that hbo way of doing things, we're going to throw a lot behind it for prestige television. >> they had bombs too, but, i mean, one after another, there's sopranos, game of thrones. >> sex in the city was in there. they got a lot of success for them. >> i watched a couple episodes of that. >> now there's true detective. >> other than this season did not do so well. i didn't finish it. >> i didn't either. >> you know what i watch? i watch the lincoln commercials because he's got to come back. >> matthew mcconaughey? >> yes. >> thanks for coming in. cue lights and music, diving into the booming business of electric dance music. believe it or not, it's a $7 billion industry catching ears across the country. when we return, we'll dive in. of (vo) what does the world run on?
7:52 am
it runs on optimism. it's what sparks ideas. moves the world forward. invest with those who see the world as unstoppable. who have the curiosity to look beyond the expected and the conviction to be in it for the long term. oppenheimerfunds believes that's the right way to invest... this big, bold, beautiful world.
7:53 am
7:54 am
. 165,000 people converge on a field outside atlanta this weekend, the biggest music festival in the country, and why sponsors are eager to get in on the action on this. morgan, great to see you this morning. >> reporter: it's great to see you too, becky. look around me. as you mentioned, more than 160,000 festival goers are expected expect, and 40,000 are
7:55 am
camping. this morning, in the rain no less. vast majority are ages 21-34, millennials, the elusive corporate demographic market. electronic dance music is a $6.9 billion industry, and popularity among this group is the reason bud light is a sponsor for tomorrow world. >> we are able to move business in terms of the share performance as well, and more importantly to become more popular, and that is really the number one objective that we have for bud light. >> reporter: and so it's not your typical sponsorship either, they are rolled out custom made cans, built a beer garden, and hired bellhops to help attendees set up for the weekend. it's a form of live events native advertising. same is true for t-mobile, a
7:56 am
sponsor as well, the wireless carrier built a pool near the main stage, and erected wireless charging stations for smart phones. basically, very elaborate branding tactics that cost a lot of money and require a lot of collaboration. tomorrow world's owner sfx entertainment chooses sponsors they work with based on willingness to craft offerings that blend in with the festival experience. really not bad, guys, for a music genera that a hand full of years ago was confined to abandon warehouses and club kid stigma. >> is this like "staying alive," and -- >> like hippy square. >> disco inferno. village people. is there any singing with this music? >> reporter: it's interesting. it's interesting you bring it up because this is music essentially born from disco when it went underground in the 70s. it's 4/4 time, music you can
7:57 am
jump around to. a reason is social media. >> i don't hear singing, morgan. disco inferno? >> reporter: if you play the music, i'll dance on camera, and no one wants that early this morning. >> do it. >> promises, promises. >> oh, that's cool. ? it's that stuff. >> reporter: for you, joe, for you. >> wow. that's me. yeah, that's me in a white outfit. anyway, thank you, morgan. we'll be right back. >> white pants.
7:58 am
opportunities aren't always obvious. sometimes they just drop in. cme group can help you navigate risks and capture opportunities. we enable you to reach global markets and drive forward with broader possibilities. cme group: how the world advances.
7:59 am
awe believe active management can protect capital long term. active management can tap global insights. active management can take calculated risks. active management can seek to outperform. because active investment management isn't reactive. it's active.
8:00 am
that's the power of active management. countdown to shut down is on. days away from the government shutting its doors again. minority whip hoyer here to say what's needed to be done to keep washington open for business. pope francis takes the big apple by storm, a jam-packed day, speaking at the u.n., a trip to ground zero, and a spin through central park, a message to the masses from the pontiff is coming up. apple's latest iphone hits shelves around the world, and the special discount day for new prime customers, and netflix set
8:01 am
to go virtual. a look inside the trio of tech high fliers straight ahead as the final hour of "squawk box" begins right now. ♪ live from the most powerful city in the world, new york r, " this is "squawk box." >> i'll dance. i'm dancing right there. >> come on. >> see, right here. >> no, you were doing it before. >> i won't do it. this is all el do. that's my -- i'll turn into kevin. >> do it. >> i'll get up and rip the microphones off. >> we're waiting for it, baby. >> i'm not going to do it, but it starts here, and then -- no one needs to. >> take it. >> no, no, no one needs to see. welcome back, everybody, this is cnbc, first in business worldwide, and i'm becky quick with john travolta today, andrew's out. we have been watching futures this morning, and check it out,
8:02 am
just waking up, it's been a big morning for the futures. right now, you're looking at the dow futures up by close to 250 points above fair value. s&p futures up by 23, and the nasdaq up by 53. if you check out the markets in europe, it's been the same stories, you can see across the board, major vans, in fact, the dax up 3%, and cac up 6%, and ftse up 2%. you can tie that back to the fed chair yesterday. >> giving the markets a jolt yesterday afternoon. she said it's likely appropriate for the fed to raise rates from where they are near 0 sometime later this year. she said. in her words. >> that it will likely be appropriate to raise the target range to the federal funds rate sometime later this year and to continue boosting short term rates at a gradual pace
8:03 am
thereafter as the labor market improves further and inflation moves back towards 2% objective. >> yellen emphasized the time decision relies on economic data. >> there was a health scare for the fed chairwoman last night, and said to be okay this morning after receiving medical attention after the speech yesterday. [ coughing ] >> pausing and coughing several times. she walked off stage on her own power. she felt dehydrated after a long speech, under bright lights. it was a 40-page speech. as a precaution, she was seen by staff on site and then continued her schedule. let's get to the other stories investors are talking about today. president obama will welcome his chinese counterparts, xi jinpeng for a visit, including talks of alleged cyber theft. we have a reading on second
8:04 am
quarter gdp coming at 8:30 eastern time. they expected an expansion, and, also, the new apple iphone6s hits stores today, and they forecast 12 million to 13 million phones fly out this weekend. >> the stocks on the move this morning, blackberry had a hider than expected loss and revenue short of kpichlestimates, now a levels seen ten years ago. nike beat expectations by 15 cents with quarterly profit of a $1.34. revenue above forecast, and they commanded higher prices for its athletic apparel and footwear, and dow components and others are at an all-time high, which not many dow components can say that after the recent selloff seen in the major areas. we're six days away from a potential government shutdown. crunch time on capitol hill. our next guest says democrats are prepared to work with
8:05 am
republicans to pass legislation. he's optimistic, but not entirely. joining us now, the house minority whip, leader hoyer. great to see you. not seen you in a while. >> i know, joe, great to be with you. >> weird to watch the dynamics of this, steny, because we e know what happened last time, and you know what party got the short end of the stick last time, and, you know, sooner or later, you know, you keep hitting yourself on the the head, you figure it out, you're not going to do it. i don't expect them to take it to that extreme again. the only people i hearsaying that they will, kind of weird, but it's people in your party as if they are daring them or hoping they do because it could mess up the 2016 presidential election. >> look, joe, there's not any doubt democrats are going to cooperate in keeping the government open, if, in fact, we have a reasonable alternative. in funding levels, it needs to
8:06 am
be adjusting to change. the republican chairman of the appropriations committee, but, clearly, this fight about planned parenthood, a fight about the affordable care act, about the debt limit in years past, taken us to the brink of what i believe will be a common sense conclusion hopefully before wednesday, and we'll keep the government open on october 1st. i don't know where you get the thought that democrats assuming, again, that we have a reasonable common sense, which historically is what we've done, both parties have come to agreement on a reasonable number to move the government forward for a short period of time while still negotiating on longer term funding levels. i don't think there's any desire on our side to shut down the government. >> right. >> that's not good policy. it's not good for the economy. it's not good for the american self-confidence. >> i'm not as close, obviously,
8:07 am
as you are, and i would -- i don't know what i'd put -- maybe i'm wrong, but i would say less than 50/50 there's a shutdown. we had roger altman. you know him, backing hillary, and he expects a shutdown. i don't know republicans predicting a shutdown? >> no republicans are predicting a shutdown, but republicans are saying if something does not happen they want to happen they will vote to shut down the government. you don't hear any democrats saying that. >> right. >> you do hear democrats saying that if we have an unreasonable bill that puts a poison pill in that republicans know is a poison pill, then, yes, there's going to be a problem, but if we pursue a reasonable, responsible, common sense resolution of the differences for the short term as we have had historically done, then, no, i don't think there's going to be a shutdown. >> leader, do you think our forefathers did intend to put the power of the purse available
8:08 am
to congress in case one or the other party was trying to do something that was so apt to the other party that that's a tool you can use? there's issues with the democrats, think of a couple where you think a shutdown is the last resort, and you'd maybe go for it. >> joe, you keep talking about that. democrats have not had a policy shutting down government. when you look at 1995, the gingrich congress, they did, in fact, shut down the government. when you look at 2012 over the debt limit, we were close to shutting down the government. 2013, we shut down the government over the affordable care act, and then it was immigration that was the policy. we almost shut down department of homeland security, and in 2014-15, the same thing occurred, and every time the government was kept open, it was because democratic votes overwhelmingly made sure that
8:09 am
happened. >> yeah. >> you recall the last time, 167 republicans voted against boehner, mccarthy, and the speaker, majority leader, and the whip, 167 republicans voted to keep the department of homeland security shuttered. it's not democrats, ever, in my opinion. >> right. >> who want to shut down government. >> but the tool is available, right? >> the tool is available, and your question, joe, was, i don't think the founding fathers had any thought in their mind that the board of directors of a great country would make a decision to shut itself down over extraneous issues. >> okay. >> important issues, but not extrae extraneous to the funding of government. >> it's a visceral issue that sharply divided a lot of people in the country. >> no doubt about that. >> i don't know the answer to that either. >> consider it on its own merit, and republicans are upset
8:10 am
because they don't have votes, but that's as gingrich said years ago, look, the american people elected a democratic president, a republican senate, many don't agree with us, and in this case, 8 voted against, and they did not get a majority for the proposition put forward, 47-52, so what the founding fathers expected was at the end of the day, the majority would rule. we would move forward with compromise. >> right. >> and if we don't compromise, that's not the responsible thing to do. >> you're friends with the vice president, aren't you, steny? >> yes, i am. >> what can you tell us? >> i think he's a great guy. i think he's been -- >> that's what i was asking. do you think he's a good guy? i was not asking if he's running for president, but whether he's a good guy. >> i think he's a good guy. if you want to leave it at that, we'll leave it at that.
8:11 am
i think he's been an absolutely terrific united states senator. i think he's been probably one of the most embalmed vice presidents of the history of the united states, very effective in so many ways, and i think that he's now trying to make a decision as to what next step he wants to take. he and i have not talked about that, and so we'll see. >> well, i'm worried about the steny hoyer statue at university of maryland. you got boomer and now it's kevin plank from underarmour. >> he can afford the statue better than i can, that's for sure. >> i think it's moved back again. sports takes -- something about politics, we don't like it anymore. >> look, joe, if you start the fund raising effort, i'm sure there's a lot of people to participate. >> i keep trying. every time you're on, i bring it up, blaring omission not to have a hoyer hall or something. >> you're a great man. >> thank you. you as well, thank you, leader
8:12 am
hoyer, we'll see ya. when we come back, pope francis spends the day in new york city addressing the united nations in just a bit. up next, the president of notre dame joining us, part of the papal ceremonies in washington this week. stick around. we'll be right back. the e-class has 11 intelligent driver-assist systems. it recognizes pedestrians and alerts you. warns you about incoming cross-traffic. cameras and radar detect dangers you don't. and it can even stop by itself. so in this crash test, one thing's missing: a crash. the 2016 e-class. see your authorized dealer for exceptional offers through mercedes-benz financial services. ♪ ♪ (under loud music) this is the place. ♪ ♪ sustainable tea tree eir boil and kale...ade from you, my friend, recognize when a trend has reached critical mass. yes, when others focus on one thing,
8:13 am
you see what's coming next. you see opportunity. that's what a type e* does. and so it begins. with e*trade's investing insights center, you can spot trends before they become trendy. e*trade. opportunity is everywhere. more data means more freedom to do..whatever. that's why at&t is giving you 50% more data. that's 15 gigs of data for the price of 10. because the more data you have, the better. and right now at at&t get $300 credit for every line you switch when you trade in a smartphone and buy any smartphone on at&t next.
8:14 am
8:15 am
pope francis arrives in new york, addressing the assembly shortly this morning, and mary thompson addresses us about the pope's schedule while in new york. mary, good to see you again. >> reporter: good to see you, becky. you know the pope covers a lot of ground here in new york city in less than 48 hours, 57 miles to be exact according to the new york police department. of course, last night, it begins with a service at st. patrick's, and this morning, it begins at the united nations where he'll address the u.s. staff in english and address the u.n. general assembly given in spanish and take a half hour, and it will probably touch on topics we've heard throughout the visit including climate change, poverty, and possibly
8:16 am
this time more about the syria refugee crisis. after that, he comes downtown to ground zero where he meets with the families of the victims of the 9/11 terrorist attacksi ina participate in an interfaith event here. there's a short break, and then in the afternoon, he goes to school in east harlem and takes a motorcade in central park where 80,000 tickets have been districted for that event. the motorcade takes him to madison square garden to deliver or say a mass for 20,000 people there. that, of course, will be the wrapup of the trip to new york and heads to philadelphia tomorrow, but expect, again, to hear at the general assembly today delivering those remarks, more on climate change, poverty, and, certainly, this message of engaging in dialogue with various factions to solve all the problems the world faces today. back to you, but i want to say a special hello to father jenkins who is there, i believe, with you. >> mary, thank you. i'm sure father jenkins is listening right now and got the message, and, in fact, joining
8:17 am
us now is father john jenkins, the president of the university of notre dame in in south bend this morning, just back from washington after the pope's visit to the capitol. thank you for being here today. >> well, it's great to be with you, becky, and i return mary's greetings. >> okay. sending thanks back to her school. father john, this pope has really energized the nation, energized the country, and beyond that, even what he's been saying around the globe. it's a different pope, pushed into politics, pushed into all kinds of messages that past popes maybe had not pushed as stridently. what do you think about what he's doing right now, and whether you're in favor of the actions? >> oh, well, he's a wonderful person, a pope for the catholic church, but also a great leader for our nation. he calls us in his simple way, in his sincere way to live a better life, to a higher ideals, and i thought his address to the joint session of congress was so
8:18 am
powerful because he appealed to the best in america, the best in ourselves for liberty, for freedom, for care, for those in need, and so he's -- it transcends the way the catholic church goes to the highest aspirations of the people. i couldn't be more excited to have him here and to be with him in the past few days. >> some of his comments, though, have been controversial even to some of the traditional catholic hierarchy, when he makes comments about divorce, bringing people in the church, making comments about people having abortions in the past. how do you feel about those social ramifications? is this the right move? >> well, i, you know, i -- what he is telling us is simply the teaching of the faith, the teaching of the catholic church, and, certainly, there are norms, guidelines, rule, and we have to obey those, but the central message of jesus was mercy and love, and what i think the pope is so wonderful about doing is
8:19 am
reminding us of that, not only by what he says, but by what he does. i just -- you know, if you read the gospels and you read the words of jesus, you just can't be -- you have to notice that he rea reaches out to sinners, all of us are sinners with compassion and mercy, and that is what pope francis is trying to tell us. >> yeah. he's certainly -- father jenkins, looking at some live pictures right now at the pope who is arriving at the united nations in new york and hear the crowds behind him, the type of crowds he's met with everywhere he's gone through in the united states. looks to be on the way in right now to the u.n., there making some address, and, really, touching on issues like climate change. i know that notre dame took the step of saying that over the next five years, you're going to be stopping the use of coal on n
8:20 am
notre dame's campus. is that a direct response to the pope? >> we've. working on sustainability for years, but the pope's call led us to think what else can we do and steps to take to address the issue? coal is one part of it, education is the most important thing we do, education of the students, and research. the pope in his address to congress mentioned the importance of american research universities finding ways to find sustainable energy for our lives, and so all of those efforts, efforts on all fronts are important, and, yes, it is a response to pope francis' call to us. >> do you think that some of the outreach that he's been doing can help stem the losses in terms of the number of people who go to mass every week, in terms of the people who are practicing catholics, can this message, do you think, reach out to the people who maybe felt disconnected in the past? >> well, i hope so, but i think the most important thing that his appeal is not to numbers, but his appeal is to the hearts, the heart of all of us, and, me,
8:21 am
in particular, and every one of us to live the faith we profess, in a joyful way, in a hopeful way, in a committed way. pope francis is going out, haranguing people is not going to do anything. what is going to change if we can live joyful lives, hopeful lives, people look at that and say, oh, i want to be a part of that community. if we do that, if we listen to the pope, and if we respond, i think we'll attract people as he says, attraction is the way people come to faith. i hope so. it's up to god, ultimately, but what we have to do is listen to the pope and respond in the best we way can. >> father, you still want the fighting irish to beat up on the university of massachusetts, don't you? you're saying all this, i mean, not for nothing, right? you want hard hitting and run up a big score, don't you? >> we just want a great contest. >> oh, boy. however it ends -- >> we want to win and i know you
8:22 am
want a win -- >> you want to win by one point? no. you want to win by 40. you can be honest. that's okay. >> win's a win here. a win's a win. 40's great, 1's great. we'll take either one, but i think it's going to be fun on saturday. >> looked good last week, but it is kind of a little -- >> 3-0. >> i know. i don't know. you look -- i thought you were going to win the national title with texas, and the next week i don't know what happened. >> well, you know, it's up and down. the kids are young. the wonderful thing about this team, a lot of kids, a lot of our best players are hurt, but they got spirit, and they play as a team, and that's what's exciteding about college football and what i love about college football. >> well, father jenkins, we want to thank you very much for joining us today, and, really, we hope you'll visit us here on set next time you're here. a pleasure talking to you. >> love to, thank you very much, becky. >> thank you, father john. >> have a great day. >> you too. a classic nfc matchup last night, thursday night football,
8:23 am
highlights next, and a look at key matchups this weekend, and don't forget to send us your stories we think we should be talking about this morning. remember to use #keepsquawking when you're tweeting. this just in: 50 million customers' data was not compromised this morning
8:24 am
in a security breach that didn't happen. wall street. not rattled. at all. no. not at all. not at all. i mean, look at the day. sir. sir. what went right? what went right? everything. thank you. with threat intelligence, behavioral analytics, and 6000 experts, ibm security will help keep you out of the news. my dad's company wasn't hacked today. cool.
8:25 am
8:26 am
washington redskins visit the new york giants last night to kick off the nfl weekend. giants won this time, 32-21, and eli manning hitting a milestone. his 100th game, but more importantly, for the giants, the first win of the season, and they improve to 1 - 2 going to next sunday's visit in buffalo. these are not my undefeated bengals, but a team calmed the b bengals to which i have no ties whatsoever. >> if they win, are you back on? >> no, no, no. they are taking on the baltimore ravens -- >> liar. >> who are looking for a win, and you can see some of the matchups coming up. what else? >> bengals go to the super bowl, and you're not on board? >> nope. it'll never happen. >> liar. >> there's a playoff --
8:27 am
>> you say it wouldn't happen so i don't have to choose. >> there's a playoff game in between the regular season. there's a couple in the super bowl, and you know in the games they -- >> they are better as long as you're not a >> good, fine, we'll see. >> market reaction after the break, and the new iphone in stores today. take a close k look at sales figures and what it mean rs for the stocks. right now, u.s. equity futures, s&p up by 23.
8:28 am
8:29 am
8:30 am
welcome back to "squawk box," breaking news, the last look at second quarter gdp, and it garners a couple of extra tens. charges towards 4% handle, falls a bit short, 3.9. we move from 3.7 to 3.9, look at internals on the consumption side, it was up 3.6. look at the priecing side, 2.1. personal expenditure is 1.9, .10 higher than the last week, and .10 hotter than we expected. corporate profits for q2
8:31 am
revised, going from 1.3 k doubled it 2.6. the not so good news is if you look at gdp now, hovering in the 1.4 area, just updated yesterday. so, of course, we had the first quarter which was not super strong up .6, and this brings up up to 3.9 and likely averaging in a number somewhere under 2 for the next one which will go through revision. it's not horrible. we are going to slow down a bit, but the big news overnight is, of course, janet yellen's explaining out there, explaining what she met, how the markets were misinterpreting, but all that aside, we hope she's okay. there was some slight issues after her speech yesterday, but there's major issues after the speech regarding the market. we see global ecstax equities p close to 220, up 7 points on the week on ten year note yields.
8:32 am
of course, don't hang on every speech of the fed, but hang on every day that point to the fundamentals of the u.s. and global economy. hopefully we're on a path to northerlization as well. back to the "squawk box" gang, and have a terrific weekend. >> this is clenching today, becky, just throughing it out there. >> all in for you guys after the long, long spell. i'm hoping for you. quickly, rick, before we let you go, what's the take on hthis? janet yellen came out last week after not raising, interpreting remarks dovish, things sold off, and you can interpret yesterday as being more hawkish, picking up ground. are we ready for rates to rise and people to believe in the economy? >> well, i'll tell ya, i'm not going to get involved in the predicting cycle again. many people including myself have gotten bruised along the way.
8:33 am
there's two points i'm certain of. that is i wouldn't look for any major horsepower in the global economy any time soon. as a matter of fact, the big debate is is there going to be slipping into the global recession of a light nature? i'm not hearing anyone talking about it heating up. that limits rates, but at end of the day, i think the real question is we're playing chicken with a window that's closed for potentially raising rates here. how janet yellen and company maneuvers into the kind of global question, which she really exaggerated when she was at an excuse not to tighten in the eyes of many, trying to pull it back, but there is a real dynamic. just the effects on the u.s. and how the u.s. leads in the other direction that maybe she gave more highlights to in the evening speech. >> rick, thank you. have a wonderful weekend. >> you too, thank you. let's go to steve liesman with the numbers we saw. steve, what do you think? >> a couple good things in the
8:34 am
report coming in better, 3.9%, on track, so we're doing about average 3% growth the last two quarters, but i have consumer spending higher, business investment higher, housing investment higher, all three of those with government purchases or government spending unchanged at 2.6%. that's good. the thing that's the best part of this, not enough to solve the problem, but inventories not up as much as expected. the change revised downward. i want to talk about the third quarter here. rick was talking about atlanta gdp now forecast, and you can see it there, 1.5%. we are tracking on our cnbc rapid update, the estimates out there, 2.4% with a range of 1.5-3%, action economics of 3%, atlanta fed at 1.5. the difference between the difference is how much inventory runoff we have in the quarter.
8:35 am
there was a buildup in invenn stories in the second quarter and they think it's going to run off. the atlanta fed model has it coming down sharply. other economists put it off. bottom line, the domestic spending part in the business and consumer are doing okay here with some big changes in invento invento inventory. i want to talk about one thing last night. why is she confident that what's going through with an inflation right now is temporary? it's a difficult chart to look at, but i can make it easy for you. this is the reason why inflation, she says, is running below their target. the yellow part is energy, so that part is a big part of the reason of 2015 why inflation is running lower. the blue part import prices, those two represent the bulk of the reason why inflation is running below the fed's 2% target, and watch the orange part get smaller as time goes by. that's labor slack. in her estimation, the issue of up employment and jobs playing less a role in the inflation short fall and the other two, the yellow and the blue, energy
8:36 am
and import prices, playing the biggest role, and that's why yesterday she said that she's confident inflation is going to head back to the fed's 2% target because of the other elements that are going to play less a role as time goes by. joe? >> interesting. see that -- >> that -- i did not -- >> did someone just draw those? is that actual data? >> it's from a model which deserves a big as risk next to it. that's right. >> not a climate change model, is it? >> it's not, but a model why inflation is not at their target. >> that's a model. we probably shouldn't put that much credence in it? >> it's what there is, joe, her thinking why it's transitory. >> makes sen. >> whether it's real or not, she's the fed chair also. >> the most important was the labor slack, and i don't know whether that's true, whether it was this big six months ago or this big now.
8:37 am
welch said there's plenty of slack, the 32 companies of clayton, they have no problem hiring people they want whatsoever. >> with a few exceptions in technology or supply change. >> right. >> there was an interesting comment yesterday from yelp saying the wage price spiral, that underpinned inflation for a very long time is now broken, that she does not see really inflation coming from wages. >> yeah. >> or wage increases. >> great. it's different this time. i like when we say that. lindsey, chief economist at stifle fixed income. did you -- that was hawkish last night, lindsey, in your view? >> you know, i don't think we learned a lot of new information from that speech. chair yellen postures the idea that 2015 is a possibility for liftoff, but as you explained earlier with steve, that's based on a model, the fed's expectations that the economy will continue to perform as expected with further improvement in the labor
8:38 am
markets, sparking upward pressure on inflation, with the global economy not having a large net drag on domestic growth, so all of these different variables are based on expectations, but if you remember, the fed is actually expecting the economy to perform better than expected for the past six years. we've been talking about rate increases since 2009, and so she also clarified that actual liftoff, actual policy will be based on the underlying data, the evolution of the underlying data and not the model or the expectations alone. >> you know, lindsey, in the past, qe, 0 rates, we all -- the stock market corporated and kept going up and up and up, and i think the fed got, you know, addicted to that and conditioned to it, but this time, the target went down and then hawkish, and it went up. maybe that's what they need to finally raise and think they are rewarded by the stock market. maybe that's what it'll finally take. >> i think in part the equity market was reacting to the fact that chair yellen reiterated her
8:39 am
expectations that a slow down in global growth will not materially deteriorate the u.s. recovery that's on track right now. >> i saw people saying that she was so -- that it would take so long and be so, you know, slow moved that it was still dovish, and that was why. people say whatever they want. anyway, thanks. thanks, lindsey. see you later. >> thank you. coming up, china to california, the latest iphone in stores today. a look at potential sales and possible stock impact next. plus, amazon luring new subscribers. now, this is dance music. we talk deep discounts and amazon strategy. stick around. we'll be right back.
8:40 am
8:41 am
8:42 am
new iphone is on sale around the world today, but is it worth the upgrade? josh lipton is here with a look at selling points and what investors should expect from sales. hi, josh. >> well, joe, i'm here at the apple store in downtown palo alto, california. you can see it's still dark, but there's already a line of people waiting to buy these, and these, joe, the 6s and the larger 6s plus, and these phones i know don't look all that different, but, in fact, apple has added a lot of new features, and we are seeing people line up around the world for the phones from
8:43 am
beijing, china, to sydney, australia to be the first to get their hands on these devices. what are they waiting for? first, the speed, the apple processor, they notice that when they open the phones, touch apps, two times faster than the 6. also a camera, new and improved, you'll see sharper, more accurate photos, and the phones can record video in 4k, but the biggest new innovation with the phones would be 3-d touch or a pressure sensitive display, and here's how it works. you can, protection, press the finger down firmly on an e-mail message, you can see the content, release the finger, and you are back out of the message and in your inbogx. the point is to create a faster, easier user experience, less friction. there's a lot of tech companies incorporate 3-d touch technology
8:44 am
into the apps, including drop box and pinterest and twitter. it's prea a it is a prep yum product, and starting today, we'll see whether consumers agree. back to you. >> josh, thank you. we'll talk more about all of this. joining us now to talk about everything that we're seeing with this is ed lee, managing editor, and also brian blair, principle and cofounder, thank you for coming in. >> thank . >> when i look at the lines, they do not look as crazy in the years past so they don't camp out like they used to, but i want the new phone. >> a lot of people want it, lines are not what they used to
8:45 am
be. in new york, we had the pope visit that stemmed the light a little bit, but i think the hard core will be hard core, and, you know what's interesting is the line a much a marketing event for apple. they'll sell the phones, that's not the issue. >> i'm not waiting at midnight, i'll get it eventually. >> exactly. they hype it up. the depth of the line adds to the marketing of the phone, so, yeah, it might be sort of not quite what it used to be, living in an apple world, but it's a sign of success it's not as cry city as it used to be. >> tougher to measure, though, monday morning, quarterbacking, trying to figure out what the numbers are, how successful it is. >> right. >> what do you think? how do you measure that? >> apple should release a number, talking about weekend sales, and i think they are going to be good, you know, they are on track, the preorders suggest they could be up year over year, and they probably will, you know, for the weekend, and what sthey struggle with is
8:46 am
an availability issue. there's limited availability. i think that could affect numbers, but i think 10 million or so has been what they talked about and they'll at least be year over year this opening weekend. >> longer term issue is what's happening with the phone companies at this point, least directly by the phone companies, apple is not the only place. >> that's it. a tremendous amount of changes with how carriers allow people to purchase, and now apple threw its hat in the ring. which is power. . they recognize people just want the new phone every year, even if looks the same and there's upgrades people want a new one. you can through apple by passing the carrier. >> the idea of coming up with a card making sure apple is the direct way you get all technology. is that something you believe in over the long term or not? >> you know, it seems to be moving in that direction. apple is moving into a one-stop shop in as many ways as they can. if they keep you from going to another retail store for all services, why wouldn't they do
8:47 am
it? similar with amazon. they would love you to do everything through them and capture that extra margin they typically give out to the third party partners. >> what is this? what is that? >> go ahead. >> oh, this is the old one. >> that's what i have, isn't it? >> yes, but i have the bigger one. >> you have the little one. >> mine's bigger. >> little man. >> call me junior. >> we'll get there. >> this new one is different than all? >> the shape of it, sesht lesse the guts are different. >> better camera. >> that's why no one's camping, not because they're established. it comes in green? >> no. it's a good point, though. it looks the same, and two features, you have to try to use. one of them is a better camera. >> that's what i want. >> records in 4k. >> wait, this has a camera? >> you may not be the ideal custom customer. >> you can do a selfie if you wanted. >> it's a good point. >> it is similar.
8:48 am
looks similar, and that's the challenge. >> i can't see it. [ laughter ] >> the other point, though, is the way you use it is different as well, trying to make it easier so it's more seamless shifting between apps. that's a significant thing. what they want is a world where it's one interface doing one thing whether it's through the 3-d touch thing they got with the new phone, they don't want you talking between apps consciously, but want them to happen for you as you ask for it. the more they move in that direction the better. >> quickly you bring up amazon, cutting the prime rate, this is a way to get people in, why? >> a gimmick, big marketing, letting people know, even the prime customers know there's original programming, based around them being successful, original programming at the emmy, $67 for prime, down for $99 for today, and it's letting people know that you can get original content, streams movies, get kindle, free shipping, and it's marketing. >> cheaper than netflix too.
8:49 am
>> exactly. >> thank you very much. >> great, thank you. when we come back, going to the new york stock exchange and jim cramer has a look at the stocks to watch when business opens on wall street. in the meantime, he's the futures up sharply this morning, a gain of 200 and 17 points now for the dow future, and s&p look to end 19 points up. ♪jake reese, "day to feel alive"♪ ♪jake reese, "day to feel alive"♪ ♪jake reese, "day to feel alive"♪
8:50 am
8:51 am
8:52 am
new york stock exchange, jim cramer joins us now. jim, your point up, was it yellen? are you absolutely sure that the markets aren't now set up to be more satisfied with the rate hike than not a rate hike? is that the wrong interpretation? >> i think the european markets should be very excited because it means that the euro is going to get very weak and we're going to have a much stronger dollar. and that's terrific if you're an exporter in europe. >> right. >> i mean, we export their up 3.5% gains, but the reality is the dollar's going to go through the roof. the only group that's going to make a lot of money is the banks. interest rates are going higher. there isn't anything here good for anything other than the banks. but we love to import what europeans are doing.
8:53 am
and they love to export to us because we have a strong dollar. but i'm with jack welch. i thought jack was on his game yesterday when he said, all right, enough. let's just go to try to figure out a way to make some money. it's going to happen. and i think that does help. we just say, okay, enough. and the jack welch view is really playing out here. >> yeah. he watches too much cnbc i think. because we do talk about it a lot, do we not? anybody at this point would be, please, please, just raise, just raise. but i couldn't figure out how to interpret, jim. because some people said it was actually dovish because she said it's still data dependent and we're going to take a long time. other people said it was more hawkish therefore the market's up. and i thought wait a minute, maybe europe goes up they open first, they go up on the weak euro and we just follow them. >> well, it's a little insane. look, you want to see interest rates down, you want to see the dollar low. everybody knows that because we're having earnings in a couple of weeks. and when you see earnings everyone's going to have to cut numbers because of the machinery meltdown as one analyst said
8:54 am
because the fact the dollar is way too strong. but this is great for europe. and the idea that what's good for europe is good for us is pretty insane right now frankly. >> yeah. okay, jim, you got -- what are you looking forward to most this weekend? college, pro, what do you think? >> you know what, becky's a little like this, i don't hate the jets. >> i don't either. >> i just don't hate them. i want to hate them. i can't. which means i have to watch the eagles game closely. ed one team i like in the afc and they have to play the eagles. but good luck to everybody. >> yeah, thank you, jim. >> no problem. >> i don't really believe him. >> i do. >> do you? >> i do. >> all right. see you in a couple minutes. thank you. up next, we have stories that have you buzzing this morning. our keep squawking segment is next. we'll be right back.
8:55 am
awe believe active management can protect capital long term. active management can tap global insights. active management can take calculated risks. active management can seek to outperform. because active investment management isn't reactive. it's active. that's the power of active management. when you do business everywhere, the challenges of keeping everyone working together can quickly become the only thing you think about. that's where at&t can help. at&t has the tools and the network you need, to make working as one easier than ever. virtually anywhere. leaving you free to focus on what matters most.
8:56 am
isn't it beautiful when things just come together? build a beautiful website with squarespace. they speak louder. we like that. not just because we're doers. because we're changing. big things. small things. spur of the moment things. changes you'll notice. wherever you are in the world. sheraton. i just had a horrible nightmare. my company's entire network went down, and i was home in bed, unaware. but that would never happen. comcast business monitors my company's network 24 hours a day
8:57 am
and calls and e-mails me if something, like this scary storm, takes it offline. so i can rest easy. what. you don't have a desk bed? don't be left in the dark. get proactive alerts 24/7. comcast business. built for business. ♪
8:58 am
if you are in new york you are probably talking about the pope. the pontiff arriving at the u.n. earlier this hour. he'll be addressing the general assembly soon. a lot of buzz on twitter about the crowds and the street closures. dominic tweets us asking where he can go today without getting stuck in traffic. just taking a look outside you can go right here right about now. not too many cars here, dominic. also the pope is heading to philadelphia for events there tomorrow. more than 1 million people are expected to attend the papal mass in the city of brotherly love. but philadelphia only has about 11,000 hotel rooms. perhaps it's not surprising air bnb reports seeing a 270% increase in philadelphia listing since april. rival vacation company home away says demand is up nearly 800% from a year ago with a 450% increase in inventories. >> i know the lodging industry in philadelphia's like what? people want to come here? we're not ready, why? oh, the pope.
8:59 am
no, i'm kidding. i'm kidding. i love philadelphia. >> it's a beautiful city. >> comcast, love philadelphia. love it, love it. joking. joking. i like it there. ben franklin's house. >> well, the liberty bell. >> the liberty bell and betsy ross's house. i love it. love philly. love it. kidding. and a shoutout to our millenial viewers. we're here for you, a new poll finds 40% of the generation actively seeks out news. yeah right. the other surveyed say six out of ten stumble on the news while they're on like facebook or god knows what they're doing or looking for entertainment online. the report analyzing millennial media habits notable because the findings are contrary to stereotype which indicated zero actually know anything about any news. >> we have a lot of milleninial who've been watching and writing in too. remember that. maybe we should play more disco music from back before their time. >> maybe we should.
9:00 am
oh, there we go. village people. san francisco. that works. >> it does. what she just did matches with everything that was playing. >> it does. we've had a lot of different beats and it really works. you know what, wouldn't you like to be on tv when you're not on tv? >> yeah. >> that would work. >> anyway, have a great weektd everybody. see you monday. right now it's time for "squawk on the street." you're looking at a live picture of the white house this morning. chinese president xi jinping making his first u.s. state visit arriving at the south lawn. in a few moments holding a bilateral with the president in about an hour. good morning. welcome to "squawk on the street." i'm carl quentenilla. they've already made news announcing this cap and trade program, but it also comes on a day where we're responding to yellen last night. futures obviously


info Stream Only

Uploaded by TV Archive on